Fed official believes CBDC isn’t needed at the moment

The United States Federal Reserve Vice Chairman for Supervision, Michael Barr, has opined that crypto requires a watchful regulation. Barr made this revelation on Wednesday during a Brookings Institution event in Washington, D.C. He urged the United States Central Bank to liaise with other financial regulators to monitor crypto activities that banks carry out. 

Michael Barr once served as Ripple Lab’s adviser and a dean of the Law school at Michigan University before his role with the Federal Reserve. His recent opinion about crypto was his first since he took up this new position. He added that crypto isn’t at its full potential to enhance financial freedom. Therefore, Barr believes regulatory authorities must all put their hands on deck to monitor the industry.

Michael Barr’s opinion on Stablecoins and CBDC

His submission extended to other sectors of the virtual assets like Stablecoins and Central Bank Digital Currency (CBDC). Michael Barr illustrated that the CBDC isn’t needed at the moment. He argued that issuing a digital dollar isn’t an urgent need. Upon his appointment by President Joe Biden, many hoped Barr would be strict against Wall Street banks. 

Most of Barr’s academic work has impressively described CBDC. He once opined that CBDC could be a valuable tool for boosting the government’s financial inclusion motives. Though, Barr divulged that the Fed could assist the government in addressing the stablecoin sector. 

Barr’s experience with the crypto space during his time with Ripple Labs has confused many on his position regarding crypto regulation. Nevertheless, He submitted that there are plans to work with other bank regulators to ensure that crypto activities within banks are monitored. Barr furthered that the approach would be on the Same risk, Same activity, and Same regulation regardless of the technology used for the activity. 

Barr indicated that he wishes to ensure that the crypto activities of banks are in line with existing regulations. He describes how the regulations have protected the banking sectors, stakeholders, and customers. Michael Barr’s approach has been more cautionary, directly reflecting Joe Biden’s position towards the industry.

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